It's Time for the Healthcare Industry to Take Advantage of Programmatic

Chris Neuner

MM&M

January 22, 2017

There's no doubt that the growth of programmatic is the ad industry's biggest success story of the past five years.

As brands across a variety of industries have sought to maximize reach and audience penetration with digital advertising efforts, programmatic has proved a cost-effective and highly proficient to accurately target consumers. Where programmatic was once considered by skeptics as the second-class cousin of direct premium publisher deals, today, as Yahoo!'s Marissa Mayer put it, “The opposite of programmatic is manual, not premium.”

So why is it that this seismic shift in digital ad spend has not been replicated within the healthcare industry? Well, there are several factors that have hampered adoption over the past few years, but perhaps the most notable is the lack of guidance, whether from government agencies, non-profit organizations, or marketing consultants. The healthcare marketing industry needs to do a better job of educating "why" and "how" other industries are using and succeeding with programmatic advertising.

Understandably, healthcare is one of the highest regulated marketing industries. There is the Health Insurance Portability and Accountability Act (HIPAA), the FTC with consumer protectionism, and what we'll call the “perception” factor. In programmatic, we also hear the term “creepiness, such as when you are re-targeted persistently after looking at a product on Amazon.

However, during 2016 we saw signs of change in programmatic ad spending in healthcare. Healthcare digital spending is going up and about 37% of healthcare digital spending is programmatic (though that is only half the percentage of other industries). On our own exchange, we are seeing a 72% year-over-year increase of healthcare dollars, from 2015 to 2016.

Herein lies the big opportunity for programmatic: delivering relevant information direct to the consumer. The volume of health-related content on the web is gigantic with a substantial amount of misinformation and subjective opinion masquerading as fact.

This is not just a confusing landscape to navigate; it's often a distressing experience for consumers, one in which time is of the essence. The best advertising in healthcare has always been the ads that deliver genuinely useful insight and guidance to consumers. Programmatic has the potential to take this utility to the next level, bringing relevant insight to consumers rather than leaving them searching around in the dark.

Furthermore, behind the huge volume of healthcare information available online sits an even broader data pool. Piecing together the different sites a consumer is visiting combined (including the marketer's website) with offline data (like in-store purchases), as well as demographic and geographic details, can present a far richer picture for advertisers in terms of what information an individual consumer might find most useful at each stage during their healthcare journey. As an efficient technology, programmatic has proved itself adept at translating data from multiple sources into useful, actionable insights, getting the right info to the right consumer more quickly, while maintaining appropriate levels of privacy.

While the benefits of programmatic advertising in healthcare are becoming clearer, the issue of maintaining regulatory compliance remains all-important.

There are longstanding FDA guidelines in place that digital marketers must observe in all consumer engagement, for example, approaching consumers via email marketing or social media. However, the Network Advertising Initiative went further on programmatic, issuing specific guidance to help advertisers succeed in this environment. This included a usage and consent framework for data derived from sensitive sources such as doctors and pharmacies, as well as all other data sources, including data collected by publishers.

The NAI is unequivocal that, for programmatic usage, all data derived from sensitive source requires opt-in consent from the patient. Beyond this, it establishes a clear distinction between data pertaining to sensitive health conditions (like HIV/AIDS, HPV, mental health, cancer, versus data on other conditions such as acne, allergies, cold/flu, and diet. Programmatic advertising can be undertaken around the latter without opt-in consent; for the former, the patient's consent is again mandatory.

This framework provides a missing link for digital marketers unsure of how to proceed with programmatic, and the stage certainly appears set for the technology to enjoy significant growth in the healthcare industry this year. Beyond this, however, it's vital that advertisers choose wisely when it comes to programmatic platforms and look for technology that can provide relevant contextual targeting in a brand-safe environment.

After all, some things don't change, and the recipe for success in the programmatic world is no different to the rest of the advertising industry — it relies on healthcare marketers giving consumers and professionals the right content, in the right place, at the right time.